The Coronavirus Is Unique But Market Corrections Are Not
As you are likely aware, the Coronavirus is having a meaningful impact on the capital markets. The fear of a global economic recession has caused a correction in the equity market (loss of 10% of more) and an increased demand for safer assets, such as fixed income securities.
Year to date equity markets are down approximately 4% but have fallen more than 10% from their recent all-time highs. Intermediate term bonds have appreciated by approximately 3% since the beginning of 2020.
The short and long-term impact of the Coronavirus is unknown, and we expect volatility to remain high in the markets. We continue to recommend clients remain dedicated to their long-term strategy while we seek rebalancing opportunities. That means that during this time of uncertainty we may be purchasing equities.
It is understandable to feel uncertainty in times of market volatility. The concern over Coronavirus is unique, but market corrections are not. Past market corrections, and financial research, supports that attempting to time the market can result in missed opportunities.